A new joint venture between two pipeline companies will allow their customers to move more crude oil, natural gas and produced water on the New Mexico side of the Permian Basin.

Five Point Energy of Houston and Matador Resources of Houston announced the formation of San Mateo Midstream II LLC on Monday. The joint venture will provide services ranging from natural gas gathering and processing to crude oil gathering, produced water gathering and saltwater disposal in southeastern New Mexico.

The region is part of the Delaware Basin, the western lobe of the larger Permian Basin — the most active shale play in the United States.

"The Delaware remains one of the most promising producing basins in North America, yet it lacks sufficient permanent 'in-basin' midstream infrastructure," Five Point Energy CEO David Capobianco said in a statement.

Matador Resources will own 51 percent of San Mateo Midstream II and Five Point will own 49 percent.

The joint venture plans to build a cryogenic natural gas plant near Carlsbad, N.M. that can process 200 million cubic feet of natural gas per day, two saltwater disposal wells and pipelines to move crude oil, natural gas and produced water from remote wells to nearby storage tanks.

Produced water is an industry term used to describe water that comes to the surface as a byproduct of oil and natural gas production. Water is often found with crude oil and natural gas in geological formations but because it is mixed with salts, metals, hydrocarbons and other compounds, it must either be cleaned or disposed.

San Mateo Midstream II is the second joint venture between Five Point Energy and Matador Resources. The companies launched San Mateo Midstream I LLC in Feb. 2017 to build pipelines and other infrastructure in Eddy County, New Mexico and Loving County, Texas.